Why I Don't Trust the Official Inflation Numbers (and Neither Should You)

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In justifying the massive money printing operations of the Fed, Bernanke used inflation data to bolster his case that the Fed's actions are both prudent and worth continuing.

Here's what he said:

Recent data show consumer price inflation continuing to trend downward. For the 12 months ending in November, prices for personal consumption expenditures rose 1.0 percent, and inflation excluding the relatively volatile food and energy components--which tends to be a better gauge of underlying inflation trends--was only 0.8 percent, down from 1.7 percent a year earlier and from about 2-1/2 percent in 2007, the year before the recession began.